For business owners looking to purchase or refinance commercial real estate, the SBA 504 loan program is one of the most attractive financing options available today. With low down payments, long-term fixed rates, and below-market interest rates, it’s a program designed to help businesses grow while preserving cash flow. Whether you’re acquiring a new property, expanding your current location, or refinancing existing debt, an SBA 504 loan could be the perfect solution.
What Makes SBA 504 Loans So Attractive?
Unlike traditional commercial loans that often require a 20-30% down payment, SBA 504 loans allow borrowers to secure funding with as little as 10% down. This means you can keep more capital in your business for operations, hiring, or other growth initiatives.
Another major advantage is the long-term fixed interest rate. SBA 504 loans offer financing for up to 25 years, ensuring predictable monthly payments and protection against rising interest rates. This kind of stability is invaluable in today’s volatile market.
How SBA 504 Loans Work
The SBA 504 loan is structured as a partnership between three parties. A conventional lender (bank or credit union) provides 50% of the loan amount, while a Certified Development Company (CDC), backed by the SBA, provides 40% of the loan amount. The borrower contributes the remaining 10%, significantly reducing the out-of-pocket expense and making financing more accessible.
Ideal Uses for SBA 504 Loans
SBA 504 loans can be used for a variety of commercial real estate projects, including purchasing owner-occupied commercial properties, expanding or renovating existing facilities, acquiring long-term equipment or machinery, and refinancing high-interest commercial real estate debt.
Who Qualifies for an SBA 504 Loan?
To be eligible, a business must operate as a for-profit company, have a net worth of less than $20 million, and occupy at least 51% of an existing property or 60% of new construction.
Why SBA 504 Loans Are a Smart Move
With their low down payment, long-term fixed rates, and flexible use of funds, SBA 504 loans offer one of the best financing options available for business owners. Whether you’re looking to buy, expand, or refinance, this program can help you secure the capital you need while keeping costs low.
If you’re considering an SBA 504 loan for your business, reach out to Bennett Capital Advisors today to explore your options and get the financing you need to grow!
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